Microsoft signs 15 year lease for 2L-sq ft office space in Hyderabad

The company will pay project developer Salarpuria Sattva Rs 52 per sqft for the space and will spend Rs. 8,000 per sqft on fitouts, they said.Sobia Khan&Ashish Kulshrestha | ET Bureau | May 30, 2017, 09:21 IST

Microsoft has signed a 15-year lease deal for nearly 2,00,000 sqft of premium office space at Knowledge City in Hyderabad and plans to pick up another 2,50,000 sqft of space in its next phase of expansion, two people aware of deal said.

The company will pay project developer Salarpuria Sattva Rs 52 per sqft for the space and will spend Rs. 8,000 per sqft on fitouts, they said.

An email query sent to Microsoft India remained unanswered till the time of press time.

Cushman and Wakefield was the consultant for the deal, the persons cited earlier said. Its managing director, Veera Babu, declined to comment on the deal.

“The property is at fit-out stage and it (Microsoft) is expected to occupy it over the next four months," one of the persons cited earlier said, adding that the office can accommodate nearly 2,000 workers.

American financial services company State Street Corporation, Synchrony Financial and EPAM are the other tenants at Knowledge City .

Redmond-headquartered Microsoft is looking for more office space in India as part of chief executive Satya Nadella's plan to tap the local market and its engineering talent. The company's Indian arm is firming up plans to expand its campus at Gachibowli, Hyderabad, which is spread over 3 million sq ft and has a built-up area of 1.5 million sqft.

Jayesh Ranjan, IT secretary of Telangana, confirmed the company's expansion plan and said he would be meeting Microsoft's leadership on Tuesday to discuss the matter.

Earlier, Microsoft was scou ting for 1.1 million sqft of space in Bengaluru for a built-to-suit campus. The company , which has offices in 10 locations across India, had planned to invest $1 billion in the campus over five years. Salarpuria Sattva has already leased out close to 5 million sqft of the 7.5 million sqft of office space at the Knowledge City project. The group is building 15 million sqft of office space in Hyderabad apart from some residential and retail projects, which will become operational by 2020.

According to JLL India, Hyderabad has the third-lowest vacancy level among all metros at 9%, and is behind Bengaluru and Pune, which have 4% and 5% vacancy levels, respectively.